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Trump says new NAFTA deal for U.S. could avert tariffs

13 Mars 2018

Canada, a close ally, sends the most steel to the United States, according to government data. Trump has favored strong tariffs for years, and some of his most prominent economic advisors are supplying him with arguments in service of his policy. In the call, Trudeau "forcefully defended" Canadian workers and industries, said the official, describing the conversation as constructive.

Trump's plan has ignited a firestorm of opposition, with criticism from around the globe, senior members of his own party, and top manufacturers including Ford Motor Co.

Six months of tense talks have produced little in the way of progress and a move by Washington to link the steel and aluminum tariffs to progress on NAFTA was rebuffed by Canada and Mexico.

Countries facing steep import tariffs proposed by President Donald Trump are likely to sue the USA for compensation and impose billions of dollars in retaliatory levies, experts say. "A tariff obviously is going to get passed on to the consumer eventually in the price of goods and that ought to be everybody's concern".

The steel tariffs were ruled illegal by the World Trade Organization in 2003 and the 2005 spat over Chinese brassiere exports, dubbed a "storm in a D-Cup" by Britain's media, was resolved in emergency talks between Brussels and Beijing.

But Mr Trump pushed back during a White House meeting with Israeli Prime Minister Benjamin Netanyahu. "I don't think you're going to have a trade war". It may also impose tariffs of clothing, cosmetics, and even Florida orange juice, Harley Davidsons, Levi Jeans, and Kentucky bourbon.

Tit-for-tat threats of that kind have happened many times in the past.

USA auto executives, including GM CEO Barra and FCA CEO Marchionne, are not in favor of the proposed tariffs.

Boosting the USA domestic manufacturing sector, partially through an increase in the percentage of US content in autos, has been one of Trump's key sticking points on NAFTA.

Trump said the European Union has "trade barriers far worse than tariffs", and again threatened to "tax their cars" if they go through with their response.

"So now we will also impose import tariffs". "But we have to do it".

58% of Republicans supported the tariffs, while 20% said they opposed them. It was Congress in 1930 that started a trade war by imposing tariffs on all other countries on a long list of goods, from eggs to peas to onions to sugar.

He also cooled down some of the rhetoric coming from Trump about a potential trade war.

"Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed", he said in one of a series of morning tweets.

But ahead of the talks, Trump appeared to tie possible exemptions for the United States' two neighbours to a "new" Nafta deal as well as other steps. For instance, America's trade deficit narrowed dramatically during the Great Recession, when national consumption faltered.

And Ross suggested that if Europe retaliates, it would only be a small fraction of the US economy.

There are signs Republicans are beginning to wake up to the danger of Trump's pronouncements, if only to prevent US stock markets from crashing.

House Speaker Paul Ryan (R-Wisconsin) told journalists he was "extremely worried" about sowing discord with Mexico and Canada and the consequences of a trade war.

"This, at the same time, reminds us that the stimulus from the tax reform may be less than estimated, given certain hidden extra charges for the economic agents". Is it caused by US consumers' voracious appetite for goods made by foreign manufacturers?

"A bilateral balance doesn't really tell you anything about what the economy is doing", said Scott Lincicome, an adjunct fellow at the libertarian Cato Institute, "just like my bilateral deficit with my grocery store doesn't tell you anything about whether I'm in debt".

USA allies, including Canada, Mexico and the European Union have been lobbying to be exempted from the tariffs, contending they pose no security risk to the United States. The US government believes steel and aluminum are strategically-sensitive materials and that the country should not fully depend on trade partners.

It used to be that the US set a standard.

Canada and Mexico have been fighting back against a series of protectionist USA demands at the NAFTA table.

Trump says new NAFTA deal for U.S. could avert tariffs